Transportation Infrastructure: Impacts of Utility Relocations on Highway
and Bridge Projects (Letter Report, 06/09/1999, GAO/RCED-99-131).
Work on highway and bridge projects often involves relocating utility
lines and facilities that distribute or transmit communications,
electricity, natural gas, water, and sewage. Schedule slippages and
higher costs associated with these construction projects may result when
these lines and facilities are not relocated in a timely manner. This
report provides information on the impact that delays in relocating
utilities are having on the delivery and the cost of federal-aid highway
and bridge projects.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-99-131
TITLE: Transportation Infrastructure: Impacts of Utility
Relocations on Highway and Bridge Projects
DATE: 06/09/1999
SUBJECT: Schedule slippages
Road construction
Highway engineering
Public roads or highways
Public utilities
Cost overruns
Construction contracts
Bridges
Highway planning
Facility transfer
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United States General Accounting Office GAO Report
to Congressional Requesters June 1999 TRANSPORTATION
INFRASTRUCTURE Impacts of Utility Relocations on Highway and
Bridge Projects GAO/RCED-99-131 GAO United States General
Accounting Office Washington, D.C. 20548 Resources, Community, and
Economic Development Division B-280707 June 9, 1999 The Honorable
John H. Chafee Chairman The Honorable Max S. Baucus Ranking
Minority Member Committee on Environment and Public Works United
States Senate The Honorable Bud Shuster Chairman The Honorable
James L. Oberstar Ranking Democratic Member Committee on
Transportation and Infrastructure House of Representatives Work on
highway and bridge projects often involves relocating utility
lines and facilities that are used in producing, transmitting, or
distributing communications, electricity, natural gas, water, and
sewage. Schedule slippages and increased costs associated with the
construction of these projects may result when these lines and
facilities are not relocated in a timely manner. In this regard,
the Transportation Equity Act for the 21st Century (TEA-21)
directed us to assess the impact that delays in relocating
utilities are having on the delivery and cost of federal-aid
highway and bridge projects. As agreed with your offices, we
examined the following for fiscal years 1997-98: (1) the extent to
which states are experiencing such delays and the causes and
impacts of the delays; (2) the number of states that are
compensating construction contractors for the added costs incurred
on their projects because of untimely relocations by utility
companies; (3) the available technologies, such as subsurface
utility engineering (SUE),1 that are being used during project
design to reduce the number or impact of utility relocation
delays; and (4) the mitigation methods that states are using, such
as incentives, penalties, and litigation, to encourage or compel
cooperation by utility companies that are relocating utilities on
federal-aid highway and bridge projects. To obtain information
about these issues, we sent a questionnaire to the departments of
transportation of the 50 states and the District of Columbia-for
which we achieved a 100-percent 1SUE is an engineering process
that incorporates new and existing technologies to identify and
map underground utilities during the early development of a
highway project. Page 1
GAO/RCED-99-131 Utility Relocations B-280707 response rate. A
summary of the responses is in appendix I.2 We obtained additional
information through interviews with officials of the headquarters
and field offices of the U.S. Department of Transportation's
Federal Highway Administration (FHWA), state transportation
departments, construction contractors, and/or utility companies in
nine states. Additional information on our scope and methodology
is discussed later in this report. Results in Brief The extent
of the delays on highway and bridge projects because of relocating
utilities ranged from none in three states to all projects in one
state during fiscal years 1997-98. The states that reported the
delays cited a variety of reasons for them, such as short time
frames for planning and designing projects, the utility companies'
lack of resources to perform relocation work, and the poor timing,
sequencing, and coordination of the relocation work relative to
the construction work. Only 10 states thought that the delays had
a great or very great impact on the costs and/or construction
schedules of federal-aid highway and bridge projects. States,
however, are not always aware of all the delays that occur. The
information that states have largely depends on the degree to
which individual construction contractors request schedule
extensions and/or submit claims for increased costs on delayed
projects. Rather than requesting extensions or submitting claims,
some contractors told us that they accommodate the delays by
shifting work crews and equipment to other segments of the project
or to another ongoing project. Forty-four states compensated
contractors for utility relocation delays by extending project
completion schedules, and 30 paid contractors' claims for
increased costs. Some contractors told us that while some direct-
cost increases resulting from delays can be recovered in their
respective states, either (1) they usually do not have the time to
prepare the paperwork or (2) the expected reimbursementalong with
its timingis simply not worth the effort to prepare the paperwork.
Other contractors told us that certain states require contractors
to assume full financial responsibility for utility relocation
delays. Forty-three states reported that they used computer-aided
design and drafting systems during the project design phase of
more than half of their projects. Such systems use computer
graphics technologies for designing and mapping construction
projects, including locating utilities. Although 2For statistical
purposes, in compiling and analyzing the questionnaire responses,
we included the District of Columbia as a state. Page 2
GAO/RCED-99-131 Utility Relocations B-280707 the Federal Highway
Administration recommends subsurface utility engineering as a
means of using new and existing technologies to accurately
identify, characterize, and map underground utilities, only seven
states responded that they used this engineering process on half
or more of their projects. However, it is unknown whether the use
of subsurface utility engineering has reduced the extent of
utility relocations or delays. Forty-one states responded that
they used early planning and coordination and 33 responded that
they used special contracting methods as a means to help mitigate
the impact of utility relocation delays. This contrasts with the
number of states that responded that they used more forceful
mitigation measures to encourage or compel utility companies to
complete utility relocations in a timely manner-three states
responded that they used monetary incentives, seven used monetary
penalties, and two used the courts. Background To accommodate
highway and bridge construction, utilities often must relocate
their lines and facilities when they lie in the path of a
construction project. Utility relocations are more prevalent today
than in the past because most current federal-aid roadwork
involves the reconstruction or expansion of existing highways and
bridges (with accompanying utility lines and facilities that
already exist) rather than new construction. Federal-aid highway
and bridge programs, administered at the federal level by FHWA,
provide states with financial assistance for various types of
projects. The projects under these programs are financed generally
on an 80-percent-federal, 20-percent-state basis-although the
split in percentage varies, depending upon the specific highway or
bridge program. In fiscal years 1997-98, about $21 billion a year
in federal funds was obligated for highway and bridge projects.
Under TEA-21, the estimated funding for fiscal year 1999 increased
to about $26.6 billion and to about $28.3 billion for fiscal year
2000. Along with the increased funding, an increased number of
projects involving the relocation of utilities is expected. At the
state level, state transportation departments generally administer
federal-aid highway and bridge projects. States are responsible
for planning, designing, and-with their contractors-constructing
highway and bridge projects, while utilities are usually
responsible for relocating their lines and facilities out of the
path of the highway or bridge construction. States often inform
utility companies of planned highway and bridge projects up to 5
years before construction begins. With an early Page 3
GAO/RCED-99-131 Utility Relocations B-280707 alert, utilities can
begin their own conceptual designs for relocating their lines and
facilities in concert with the planned projects. During predesign
meetings between the project designer and the utility
representatives, the utilities learn about upcoming highway and
bridge projects, as well as probable construction time frames.
Even under the best of circumstances, the planning and designing
of highway and bridge projects often take a long time, and
frequently involve delays, cancellations, changes in alignment,
and other factors that can alter the involvement of utility
companies. These conditions encourage highway agencies to wait
until later in the design process to involve the utilities.
Similarly, utility companies prefer to wait until they are certain
that the project's planning and design are firm before they begin
their relocation work. Construction contractors and utilities need
to schedule their respective work so that their activities are
properly sequenced. Before utility companies can relocate their
lines and facilities, they must have the right-of-way to the
locations where the utilities are to be moved, and those sites
need to be cleared and graded.3 To varying degrees among states
and individual projects, the site preparation work is performed by
the construction contractor, the utility company, or a separate
contractor. Once the site is cleared, the utilities can install
their conduits, ducts, or poles and connect their lines and
facilities at the new location. However, if a utility does not
have the needed right-of-way or the site is not cleared or graded,
a utility company's relocation work would likely be delayed. If
for these, or any other reasons, a utility does not relocate its
lines or facilities as scheduled, the construction contractor's
schedule can be delayed. Extent, Causes, and During
fiscal years 1997-98, about half of all federal-aid highway and 4
Impacts of Delays bridge projects involved the
relocation of utilities. States' responses to our questionnaire
varied widely-from no delays resulting from utility Resulting From
Utility relocations in three states to delays on all projects
involving the relocation Relocations of
utilities in one state. However, the full extent of the delays on
federal-aid highway and bridge projects caused by relocating
utilities is not known because states are not always aware of the
delays. The states provided us with a number of reasons for the
delays, such as the following: short time frames for states to
plan and design projects, which affect all 3Right-of-way is a
general term denoting real property, or an interest therein,
usually in a strip, acquired for or devoted to transportation
purposes. 4Based on the numbers of advertised projects in the
states' responses to GAO's questionnaire. Page 4
GAO/RCED-99-131 Utility Relocations B-280707 subsequent aspects of
a project, including utility relocations; utility companies'
limited resources to perform an expanding amount of relocation
work; and the poor timing, sequencing, and coordination of the
utility relocation and construction work. States generally did not
perceive that the delays have had a great impact on the costs and
construction schedules of federal-aid highway and bridge projects.
States Indicated That Forty-two states responded to our
questionnaire on the percentage of Projects Were Delayed, but
delays caused by the relocation of utilities on federal-aid
highway and the Full Extent Is Not bridge projects in their
respective state for fiscal years 1997-98. The extent Known
of these delays ranged widely among the states-from none reported
by Montana, North Dakota, and Vermont to about 95 percent of the
completed projects involving utility relocations in Idaho and to
100 percent of such projects in Rhode Island. We found that 20
states reported delays for 0-10 percent of their projects, 8 for
11-20 percent, 6 for 21-30 percent, and 8 for above 30 percent.
Nine states did not provide an estimate. Figure 1 shows the extent
of the delays reported for each state. Page 5
GAO/RCED-99-131 Utility Relocations B-280707 Figure 1: States'
Responses Regarding Percentages of Federal-Aid Projects Involving
Utility Relocations That Were Delayed, Fiscal Years 1997-98 WA MT
ME ND OR
MN
VT ID
NH SD WI
NY MA WY
MI CT RI IA
PA NV NE
NJ OH MD DE UT
IL IN
DC CO
WV CA
KS
VA MO KY NC AZ
TN OK NM AR
SC MS AL GA TX LA FL AK HI
0-10 percent 11-20 percent 21-30 percent Above 30 percent No
estimate provided Source: GAO's analysis of states' responses to
GAO's questionnaire. Page 6
GAO/RCED-99-131 Utility Relocations B-280707 Although 20 states
reported that about 10 percent or less of the federal-aid highway
and bridge projects involving the relocations of utilities
encountered delays because of these relocations, this does not
necessarily indicate the full extent of the delays. For example,
although Connecticut reported that only about 3 percent of its
projects involving utility relocations had delays caused by the
need to relocate utilities, a state transportation official told
us that Connecticut does not keep track of all the delays caused
by utility relocations. This official stated that the 3-percent
figure, which the state reported, represents the state's federal-
aid highway and bridge projects involving documented delays in
relocating utilities. Therefore, if delays were not documented,
they were not included in the state's response. A contractor
association official in Connecticut told us that the state has no
good indicators of the frequency and magnitude of delays caused by
utility relocations. One contractor pointed out that because
Connecticut does not reimburse contractors for the cost increases
resulting from delays in relocating utilities, the costs of such
delays are often anticipated and incorporated somewhere in a given
contractor's bid. As such, the costs of these delays go
unreported. States Gave Various The reasons that states gave
for delays caused by utility relocations were Reasons for Delays
related but varied. Table 1 shows the reasons most frequently
indicated for such delays and lists them according to the number
of states that considered them to be a moderate or major reason
for delays. Page 7
GAO/RCED-99-131 Utility Relocations B-280707 Table 1: States'
Responses Identifying Reasons for Delays in Relocating
Reason
Number of states Utilities Utility
lacked resources
34 Short time frame for state to plan and design
33 project Utilities gave low priority to relocations
28 Increased workload on utility relocation
28 crews because highway/bridge construction had increased Delays
in starting utility relocation work:
28 some utilities would not start until construction contract was
advertised or let Phasing of construction and utility relocation
26 work out of sequence Inaccurate locating and marking of
existing 23 utility
facilities Delays in obtaining rights-of-way for utilities
23 Shortages of labor and equipment for utility
19 contractor Project design changes required changes to
19 utility relocation designs Utilities were slow in responding to
16 contractors' requests to locate and mark underground utilities
Inadequate coordination or sequencing
13 among utilities using common poles/ducts Source: States'
responses to GAO's questionnaire. As the table shows, one of the
most prevalent reasons cited by the states was the short time
frame for them to plan and design projects, which can affect all
subsequent aspects of the project, including utility relocations.
With recent increases in the federal funding of highway and bridge
projects, states are planning and designing an increasing number
of projects in a shorter amount of time. For example, Colorado
told us that Page 8
GAO/RCED-99-131 Utility Relocations B-280707 its highway
construction program had nearly doubled since 1995 and that, in
its rush to get projects under contract, time had become a
shrinking resource-particularly the time available for planning
and designing projects and the time available for designing and
relocating utility lines and facilities. Shorter time frames for
planning and designing construction projects also reduce the
amount of time available to acquire needed utility rights-of-way.
When utility facilities are located on a state's rights-of-way and
those existing rights-of-way are not sufficient to accommodate a
planned utility relocation, additional rights-of-way need to be
acquired. Utilities are generally responsible for acquiring
additional rights-of-way that may be needed for a given project.
In some instances, the utilities may already have the necessary
rights-of-way prior to the construction of the highway and/or
bridge project (known as "prior rights"). If the utility has prior
rights, the state usually pays for any additional rights-of-way
that may be needed, as well as for the relocation itself. Because
utilities cannot relocate their facilities unless they have the
right-of-way for the new location, delays in obtaining rights-of-
way can, in turn, slow the timing of relocation work. Utility
relocations for large highway and bridge construction projects can
be very complicated. In addition to the state transportation
department and its construction contractors, multiple utilities
also may be involved. To reduce scheduling problems, the
contractors would prefer that, to the extent possible, all utility
relocation work be finished before the highway or bridge
construction begins. Preconstruction conferences involving all the
parties to the project provide an opportunity for the state agency
and the utility companies to communicate any final changes in
project schedules, jointly review and approve final sets of plans,
and identify key points of contact for the project. The
conferences also provide an opportunity for the contractors and
utilities to agree upon work schedules that will minimize possible
conflicts during construction. Several contractor officials told
us that the work schedules that the utilities provide at
preconstruction conferences are often not specific or reliable.
Contractor officials also stated that utilities are often
unresponsive to contractors' requests for needed actions.
Contractor and state highway officials pointed out, however, that
utilities are not solely to blame for all delays associated with
relocating utilities. In this regard, utility company officials
told us that (1) contractors often make changes to construction
work schedules, (2) they have limited resources to respond Page 9
GAO/RCED-99-131 Utility Relocations B-280707 to contractors'
requests, and (3) their first obligation is in servicing their
existing and new customers. Furthermore, even when reimbursed by a
state, utility companies do not profit from relocation work and
generally do not recover all of their indirect costs. Impacts of
Delays Vary As with the extent of delays, quantifiable
information on the full impact of delays caused by relocating
utilities on the cost and delivery of federal-aid highway and
bridge projects does not exist. Delays in relocating utilities can
cause construction work to be rescheduled or delayed, or result in
contractor claims or litigation. In addition, less tangible
impacts result. For example, safety concerns, such as leaving
excavations open while conflicts are resolved, increase the risk
to state agencies, contractors, utility companies, and the
traveling public. Furthermore, public travel on highways under
construction is more time-consuming and less convenient. Five
states responded that delays caused by relocating utilities had a
great or very great impact on the construction schedules of
federal-aid highway and bridge projects. Five states responded
that these delays greatly or very greatly increased the
construction costs to the state, two states responded that they
greatly increased the costs to construction contractors, and two
states responded that they greatly or very greatly increased the
costs to other utility companies. In addition one state, New
Mexico, reported that delays greatly affected utility coordination
efforts on other projects. The states responding that the delays
had a great impact on the projects' schedule and/or costs for
fiscal years 1997-98 are shown in figure 2. Page 10
GAO/RCED-99-131 Utility Relocations B-280707 Figure 2: States
Reporting Great or Very Great Impacts From Delays Caused by
Relocating Utilities, Fiscal Years 1997-98 U S S
S S C U S C Increased length of project construction schedule S
Increased construction costs to state C Increased costs to
construction contractors U Increased costs to other utilities
Source: States' responses to GAO's questionnaire. Page 11
GAO/RCED-99-131 Utility Relocations B-280707 Although, as
indicated by figure 2, most states did not report that delays
caused by relocating utilities had a great impact on the
construction schedules and costs of federal-aid highway and bridge
projects, officials of one national contractor association and
several contractor companies told us that states are not fully
aware of the increased costs borne by contractors because of these
delays. This is because many states do not reimburse their
contractors for the costs resulting from delays caused by
relocating utilities and, therefore, the documentation supporting
the full impacts of delays is not sent to the states. Even in one
state that provides reimbursements, Rhode Island, four contractors
that we met with told us that, rather than take the time to gather
the documentation and submit a claim to the state, they find it
easier to either absorb the increased costs or simply factor an
estimate of such costs into their contract bids. State and
contractor officials told us that contractors can lessen the
impact of some relocation delays by shifting their work crews to
other segments of the delayed project, or to entirely different
projects until the delayed work can be resumed. To illustrate,
Idaho reported that about 95 percent of its projects had been
affected by delays in relocating utilities. Such delays caused the
respective contractors to shift work crews and adjust their
schedules; thus, only about 6 percent of Idaho's projects actually
resulted in contractual change orders or claims. States'
Compensation States can compensate contractors for delays
caused by relocating utilities of Contractors by
extending project completion schedules and/or paying contractors'
claims for increased costs. Claims due to delays in relocating
utilities may be included in the federal share of project costs
provided to states.5 However, it must first be determined that (1)
the utilities were relocated prior to advertising for bids, or
necessary coordination was arranged with the utility company to
avoid delaying the contractor, (2) approved state procedures were
followed, (3) construction work was delayed by the utility company
through no fault of the construction contractor, and (4) the state
exercised reasonable efforts to control the situation. Some
contractors in states that reimburse contractors for direct cost
increases resulting from delays told us that they usually do not
have the time to prepare the paperwork or that the expected
reimbursement-along with its timing-is simply not worth the effort
to prepare the paperwork. Other contractors told us that certain
states require contractors to assume full financial responsibility
for delays caused by relocating utilities. 5See Program Guide,
Utility Adjustments and Accommodation on Federal-Aid Highway
Projects, fourth edition, Federal Highway Administration, U.S.
Department of Transportation (Mar. 1998). Page 12
GAO/RCED-99-131 Utility Relocations B-280707 Twenty-nine states
responded that they provided both project time extensions and
reimbursements to contractors for cost increases resulting from
delays in relocating utilities in fiscal years 1997-98, 15 states
provided only time extensions, 1 provided only cost reimbursement,
5 provided neither, and 1 responded that it did not know if it
gave time extensions but it did not provide cost reimbursements.
The states responding that they provided project time extensions
and/or reimbursed contractors for cost increases in fiscal years
1997-98 are shown in figure 3. Page 13
GAO/RCED-99-131 Utility Relocations B-280707 Figure 3: States'
Responses Concerning Compensation of Contractors for Delays Caused
by Relocating Utilities, Fiscal Years 1997-98 Project time
extensions Reimbursed contractors' cost increases Source: States'
responses to GAO's questionnaire. Page 14
GAO/RCED-99-131 Utility Relocations B-280707 Thirty-three of the
44 states shown in figure 3 reported that in fiscal years 1997-98,
they granted time extensions for delays caused by relocating
utilities that ranged from 1 to 912 days. Eleven of the 30 states
that compensated contractors for costs incurred as a result of
these delays also identified the dollar amounts compensated in
fiscal years 1997-98. These amounts ranged from $7,855 to $8
million per state and totaled $15.4 million for the 11 states.
States' Use of The states identified technologies used in
locating and identifying utilities Available during the
design process to facilitate utility relocations. Technologies
* Computer-aided design and drafting (CADD) systems use computer
graphics technologies to design and map construction projects and
presents an expedient way to consolidate many different design
aspects, such as rights-of-way maps, into a common database, or
base map. Forty-three, or about 84 percent, of the respondents to
our questionnaire said that they had used CADD on more than half
of their projects. * Vacuum extraction, which removes dirt and
debris from test holes with a vacuum, is one of the more accurate
methods for the nondestructive location of underground utilities.
Seven states used it on more than half of their projects. *
Geographic information/global positioning systems are used for
mapping purposes. Geographic information systems use software and
hardware to develop an information database using coordinates of
various land features and mapping techniques. Global positioning
systems represent a newer method of providing ground control
points for mapping purposes by monitoring satellite signals; on-
ground receivers pick up the satellite information, which is then
transferred to an attached computer. Fifteen states reported they
had used these systems on more than half of their projects. *
Subsurface utility engineering is used to incorporate new and
existing technologies to identify and map underground utilities
during the early development of a highway project. This
engineering process might include using vacuum extraction to help
locate utilities and CADD or geographic information systems for
information management and mapping activities critical to the
design process. Having such information early in the design
process offers project designers the ability to redesign the
project or avoid existing utilities. Seven states reported that
they had used SUE on more than half of their projects. Page 15
GAO/RCED-99-131 Utility Relocations B-280707 The states that
reported that they had used these various technologies on more
than half of their projects in the design phase during fiscal
years 1997-98 are shown in figure 4. Page 16
GAO/RCED-99-131 Utility Relocations B-280707 Figure 4: States'
Responses Regarding Use of Selected Technologies on More Than Half
of Their Projects, Fiscal Years 1997-98 CADD CADD CADD GPS
GPS CADD CADD
CADD
CADD GPS
GPS GPS
CADD SUE CADD CADD
CADD GPS VE GPS
CADD SUE CADD
CADD CADD GPS
GPS CADD
CADD CADD SUE GPS
CADD CADD CADD CADD
VE VE CADD GPS
CADD CADD CADD
SUE VE
CADD SUE CADD CADD
GPS GPS VE VE SUE SUE
CADD CADD CADD VE CADD
CADD CADD CADD CADD GPS GPS
CADD CADD CADD CADD CADD CADD CADD CADD VE
Vacuum extraction GPS Geographic Information/Global
Positioning Systems SUE SUE Source: States' responses to GAO's
questionnaire. Page 17
GAO/RCED-99-131 Utility Relocations B-280707 Because we were
specifically asked to examine SUE, we took a closer look at its
use among the states. FHWA has recommended the use of SUE to
accurately identify, characterize, and map underground utilities
during the design phase of a highway or bridge project. In April
1997, FHWA reported several case studies to illustrate the cost
savings or cost avoidances that can result from using SUE.6 For
example, Virginia made design adjustments to a major highway
project and eliminated 61 of 75 potential utility conflicts with
construction. By making the design changes, Virginia reported that
utility relocation work estimated to cost $731,425 was avoided.
With the cost of the project's SUE activities totaling $93,553, a
net savings of $637,872 was reported. In another case, using SUE
technology enabled Maryland to redesign a project and thus reduce
the length of gas, water, and sewage lines needing relocation from
5,000 to about 400 feet for each utility. SUE activities cost the
project about $56,000, but Maryland reported that the state and
the utilities avoided over $1.3 million in relocation costs that
they otherwise would have incurred. Still another example was a
project in North Carolina, where vacuum extraction technology was
used in conjunction with SUE to precisely identify the location of
a water line running alongside 18 miles of roadway. According to
North Carolina, the process, costing about $10,000, resulted in
identifying approximately 4 miles of the water line that could
remain in place, thus helping the state and the utility company
avoid about $500,000 in relocation costs. We examined whether the
states using SUE on more than half of their projects performed
better than the rest of the states in terms of having fewer
projects involving utility relocations, having less costly
projects, or having fewer delays caused by utility relocations.
Five of the seven states that indicated they used SUE on more than
half of their projects also included information on the numbers
and costs of advertised projects, and the delays of completed
projects, which we used to compare with similar information
provided by many of the 32 states that reported that they were not
using SUE to any great extent. The results of our comparisons were
inconclusive. For the small number of states using SUE, we got
mixed results with respect to whether the use of SUE directly
affected the number of utility relocations, their costs, and any
associated delays. These results 6Subsurface Utility Engineering,
Federal-Aid and Design Division, Office of Engineering, Federal
Highway Administration (Apr. 1997). Page 18
GAO/RCED-99-131 Utility Relocations B-280707 indicated that other
factors may be affecting the extent of utility relocations and the
extent of the delays caused by utility relocations.7 Under a July
1997 contract with FHWA, Purdue University is currently conducting
a 2 1/2-year study to determine the effectiveness of SUE on
reducing costs and delays on highway projects. This study is
examining the use of SUE in North Carolina, Ohio, Oregon, Texas,
Virginia, Wyoming, and Puerto Rico. A final report is due in late
1999. Mitigation Methods Incentives,
penalties, and/or the courts were infrequently used to Used
encourage or compel utility companies to relocate utilities for
federal-aid highway and bridge projects in a timely manner. Forty-
one states used early planning and coordination, and 33 states
used special contracting methods to help mitigate or ameliorate
the impact of relocating utilities. Table 2 shows the number of
states that reported that they used these mitigation methods or
measures in fiscal years 1997-98. Table 2: States' Responses
Regarding Mitigation Methods Used by States, Mitigation
method
Number of states Fiscal Years 1997-98 Monetary
incentives
3 Monetary penalties
7 Courts
2 Early planning and coordination
41 Special contracting methods
33 Source: States' responses to GAO's questionnaire. Use of
Incentives Although three states provided
monetary incentives to encourage utility companies to complete
utility relocations on federal-aid highway and bridge projects,
none of these incentives were contingent on the timely completion
of the relocation work. For example, Delaware noted that it paid
one of its construction contractors to perform the utility trench
excavation for one utility relocation project. The second state,
Missouri, stated that it pays utility companies for the state's
share of relocation costs 7States' identified the extent to which
they used SUE on the basis of the projects in the design phase
during fiscal years 1997-98. Our comparisons would be affected if
the states significantly altered their use of SUE for projects
advertised or completed during fiscal years 1997-98. Page 19
GAO/RCED-99-131 Utility Relocations B-280707 before the utilities
begin work, subject to a final audit. Lastly, Massachusetts
pointed out that it reimburses utilities for 100 percent of the
costs of relocating utilities on bridge replacement projects.
Under the provisions of this program, Massachusetts makes the
reimbursements contingent on the utilities' completing the
relocation work on time. For each day that the utility falls
behind schedule, the state reduces the amount being reimbursed. If
relocating the utilities causes a contractor to incur a delay that
results in a claim, the cost of the claim would also be deducted
from the moneys due the utility. Although these provisions to
reduce payments for delays incurred are written into project
agreements, a Massachusetts highway official told us that these
provisions have never been used. Use of Penalties Seven states
responded that they had assessed monetary penalties against
utilities that failed to complete utility relocations on federal-
aid highway and bridge projects in a timely manner. These states
either charged the utilities for the costs that the states
incurred or for contractor claims paid as a result of delays in
relocating utilities. These penalties were not directly tied to
missed agreed-upon utility relocation dates but were assessed on a
case-by-case basis. In 1998, the state of Rhode Island, which pays
for all of the costs of relocating utilities on federal-aid
highway and bridge projects, considered legislation that would
have required utilities to relocate their facilities within 30
days of receiving notice. If utilities were not relocated within
that time, Rhode Island's department of transportation would have
been permitted to contract for the relocation with a private
company, and the utility company would had to have paid for the
cost of the contract. The utilities successfully argued that
having them pay for the relocations would increase the cost to
their utilities' customers, and the proposed legislation was not
enacted. Use of Courts The courts are seldom used to
discipline utility companies for untimely utility relocations.
Only two states reported using the courts over the past 2 years.
Kentucky responded that it had used the courts very infrequently,
and Texas responded that it had used the courts on only one
occasion. Officials from Maryland, which has not used the courts,
questioned whether the state could be successful in court because
it would be difficult to show that the utility was at fault. The
officials said that the state would need to demonstrate that (1)
it or the construction contractor had notified the utility company
in a timely manner of the work to be done and (2) the utility had
not been kept from doing its relocation work. An Page 20
GAO/RCED-99-131 Utility Relocations B-280707 official from Maine
pointed out that his state works closely with utility companies to
resolve problems and conflicts. He expressed concern that
litigation would jeopardize the positive working relationship that
exists between the Maine department of transportation and the
utilities. Officials in several of the states we visited echoed
this comment. Early Planning and Forty-one states
responded that they used early planning and coordination
Coordination methods to help avoid or reduce
delays in relocating utilities and their impacts on highway and
bridge projects. For example, various states were * providing much
earlier-in some instances 5-year-notices of upcoming projects; *
inviting utility companies to meetings early in the design phase
of a project; * holding monthly, quarterly, or other periodic
planning/coordination meetings; * providing advanced rights-of-way
and utility relocation funding before the highway and/or bridge
construction work was funded; and * improving coordination efforts
and working relationships. Illustrative of some of the actions
being taken by states to deal with utility relocation concerns,
the Texas department of transportation recently developed and
adopted what it calls its Utility Cooperative Management Process.
This process was put together as a means of discovering and
incorporating utilities' concerns into the planning, design,
acquisition, and construction phases of project development. Texas
recognized, as have many other states, that early coordination
provides for more efficient highway design, economical utility
relocation, and reduced construction costs. Texas's goal is to (1)
accommodate utilities during the planning and design phase and (2)
when utility adjustments are necessary, implement an adjustment
plan that is compatible with the state's established contract
award scheduling and construction sequencing. Use of Special
Contracting States are using special contracting methods to
help mitigate relocation Methods delays.
One way of reducing conflicts between construction work and
relocation work is to include the relocation work in the
construction contracts; thus, giving the construction contractor
more control over all the work. Fifteen states-Alabama, Alaska,
Colorado, Delaware, Georgia, Kentucky, Louisiana, Maine, Maryland,
Missouri, Montana, New Hampshire, North Carolina, Ohio, and South
Carolina-have included Page 21
GAO/RCED-99-131 Utility Relocations B-280707 utility relocation
work, such as that for water and sewer lines, directly in
construction contracts for certain projects. Another contracting
method used by nine states-Louisiana, Maine, Maryland,
Mississippi, Missouri, North Carolina, Ohio, Oregon, and Rhode
Island-is to separately contract the site clearing and preparation
work and allow utility companies the time to relocate their lines
and facilities before the state advertises the highway
construction project. A state transportation official told us,
however, that such a phased approach can generally extend the
length of each job. Some representatives of utility companies told
us that they are reluctant to relocate utilities too soon (e.g.,
before a construction project starts) because of the possibility
of subsequent project redesigns and the need for them to come back
and redo what they have already done. Partnering is still another
mitigation method mentioned by 11 states-Alaska, Connecticut,
Delaware, Indiana, Kansas, Kentucky, Maine, Massachusetts,
Michigan, Nebraska, and Texas. This method, which is advocated by
at least one national contractor association, seeks to remove the
adversarial relationships that sometimes exist between states,
contractors, and utility companies and replace them with business
relationships that are based on common goals and a desire to work
productively together.8 According to the contractor association,
partnering does not change nor release any of the contractual
requirements but helps all parties recognize that a basic tenet of
contract law is to act in good faith. A Massachusetts highway
official explained that partnering has been used on large
projects. State, contractor, and utility company officials
involved in the project meet weekly or biweekly to discuss all
issues and resolve problems. This official said that partnering
helps improve communications and reduce delays but that it does
not resolve all delay problems. He explained that when conflicting
demands for a utility company's resources arise, relocating
utilities may receive a lower priority by the utility company
because it entails expending resources as opposed to doing
something that generates income. Contracts associated with very
large federal-aid highway and bridge projects sometimes contain
unique features involving utility relocations because of the
magnitude of the relocation work. For example, the ongoing
Interstate-15 Project in Salt Lake City, Utah, is a multi-billion-
dollar, 17-mile project that involves the relocation of the lines
and facilities of about 45 utility companies and must be completed
in time 8See Partnering: A Concept for Success, The Associated
General Contractors of America (Oct. 1991). Page 22
GAO/RCED-99-131 Utility Relocations B-280707 for the 2002 Winter
Olympic Games. As a means of facilitating the relocation of
utilities on this time-critical project, agreements were reached
whereby the relocation work of all but one of the utilities is
being done by the construction contractor. The electric utility
company is the only holdout, preferring to remain in charge of its
relocation work. Performing the utility relocation work gives the
contractor more control over this work, thus reducing the
coordinating and work-sequencing problems that might otherwise
arise. Another example of a very large highway and bridge project
is the $10.8 billion Central Artery/Tunnel Project in Boston,
Massachusetts. This project involves hundreds of miles of gas,
electric, sewer, telephone, and other utility lines and facilities
that needed to be moved out of the path of the new highway. At the
time of our visit to the project in September 1998, the utility
work was more than 80-percent complete. Project officials
attributed the success they had in relocating the utilities to
their ability to (1) obtain utility companies' involvement from
the start and throughout the design process; (2) require
construction contractors to build the ducts and conduits and the
utilities to perform the hookups, such as cutting and splicing
cables; (3) enhance project coordination by having each utility
provide an employee liaison; and (4) use SUE early in the design
process. Project officials estimated that the costs of relocating
utilities for the Central Artery/Tunnel Project will total about
$1 billion, including about $150 million that represents
reimbursements to the various utilities for their relocation
costs. Observations The relocation of utility lines and
facilities is an integral part of many highway and bridge
construction projects. Project construction is often delayed when
utilities are not relocated in a timely manner for the
construction work to proceed. There is no one solution to this
problem. Each highway or bridge project is different, with its own
set of circumstances, and must be dealt with accordingly by those
involved in the project. The highway and bridge projects that have
proceeded most smoothly are those that involved a lot of
coordination, cooperation, and communication between the various
project participants early in the project's design and throughout
the project. However, delays in relocating utilities may become
even more pronounced in the future. Increased funding provided
under TEA-21 for highway and bridge construction currently and in
the years ahead is expected to result in increased (1) numbers of
ongoing highway and bridge construction projects and (2) demands
on the resources of state transportation departments, Page 23
GAO/RCED-99-131 Utility Relocations B-280707 construction
contractors, and utility companies. Because the resources
available for utility relocation work are already stretched thin,
utility relocation delays will continue to demand attention by all
project participants. Agency Comments We provided the
Department of Transportation with a draft of this report for
review and comment. The Department generally agreed that the facts
have been accurately and fairly presented in the report. Scope and
To assess the impact that delays in relocating utilities are
having on the Methodology delivery and cost of federal-aid
highway and bridge projects, we conducted various literature
searches. We met with officials from FHWA headquarters, the
American Society of Civil Engineers, and several subsurface
utility engineering companies. We visited nine states and met with
officials from FHWA, state departments of transportation, and
construction and utility companies. We visited Delaware, Maryland,
North Carolina, and Virginia because of their proximity to
Washington, D.C. We visited Connecticut because construction
contractors in the state brought the issue of utility relocations
to Congress's attention. Massachusetts and Utah were selected
because of the large highway project going on in each statethe
Central Artery/Tunnel Project in Massachusetts and the I-15
Project in Utah. Both are large-dollar projects involving
extensive utility relocations. Rhode Island was selected because
its state legislature recently considered a bill that would impose
a penalty on utility companies that failed to relocate their
utilities within 30 days. Texas was selected because several
officials we met with mentioned its utility relocation activities.
We also met with representatives of the Connecticut Road Builders
Association, Construction Industries of Massachusetts,
Construction Industries of Rhode Island, the Associated General
Contractors of America, and Bell Communications Research. We
contacted, by telephone, officials from the Baltimore City Public
Works, Maryland Public Service Commission, Electric Power Research
Institute, and American Road and Transportation Builders
Association. We attended a forum on utility relocation delays
hosted in July 1998 by the Construction Automation & Robotics
Laboratory, North Carolina State University; a national utility
relocation conference held in Louisville, Kentucky, in October
1998; and a Utility/Contractor Forum hosted in October 1998 by the
Connecticut department of transportation. Page 24
GAO/RCED-99-131 Utility Relocations B-280707 Finally, on the basis
of information we obtained through the above efforts, we prepared
a questionnaire and mailed it to the highway departments of each
of the 50 states and the District of Columbia. We received
responses from all 50 states and the District of Columbia, which
we summarized and analyzed. The responses provided us with general
information regarding the extent, causes, and impacts of delays
caused by relocating utilities in each of the states and some
information on how each state is responding to the problem. We
performed our work from July 1998 through May 1999 in accordance
with generally accepted government auditing standards. We are
sending copies of this report to the Honorable Rodney E. Slater,
Secretary of Transportation; Kenneth R. Wykle, Administrator,
Federal Highway Administration; the Honorable Jacob J. Lew,
Director, Office of Management and Budget; state departments of
transportation; interested congressional committees; and other
interested parties. We will send copies to other interested
parties upon request. Major contributors to this report are listed
in appendix II. Phyllis F. Scheinberg Associate Director,
Transportation Issues Page 25
GAO/RCED-99-131 Utility Relocations Contents Letter
1 Appendix I
28 Summary of States' Responses to GAO's Questionnaire Appendix II
35 Major Contributors to This Report Tables
Table 1: States' Responses Identifying Reasons for Delays in
8 Relocating Utilities Table 2: States' Responses Regarding
Mitigation Methods Used 19 by States, Fiscal
Years 1997-98 Figures Figure 1: States' Responses
Regarding Percentages of Federal-Aid 6 Projects
Involving Utility Relocations That Were Delayed, Fiscal Years
1997-98 Figure 2: States Reporting Great or Very Great Impacts
From 11 Delays Caused by Relocating Utilities,
Fiscal Years 1997-98 Figure 3: States' Responses Concerning
Compensation of 14 Contractors for Delays
Caused by Relocating Utilities, Fiscal Years 1997-98 Figure 4:
States' Responses Regarding Use of Selected
17 Technologies on More Than Half of Their Projects, Fiscal Years
1997-98 Abbreviations CADD computer-aided design and
drafting (system) FHWA Federal Highway Administration GAO
General Accounting Office SUE subsurface utility
engineering TEA-21 Transportation Equity Act for the
21stCentury Page 26
GAO/RCED-99-131 Utility Relocations Page 27 GAO/RCED-99-131
Utility Relocations Appendix I Summary of States' Responses to
GAO's Questionnaire Page 28 GAO/RCED-99-131 Utility
Relocations Appendix I Summary of States' Responses to GAO's
Questionnaire Page 29 GAO/RCED-
99-131 Utility Relocations Appendix I Summary of States' Responses
to GAO's Questionnaire Page 30
GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
Responses to GAO's Questionnaire Page 31
GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
Responses to GAO's Questionnaire Page 32
GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
Responses to GAO's Questionnaire Page 33
GAO/RCED-99-131 Utility Relocations Appendix I Summary of States'
Responses to GAO's Questionnaire Page 34
GAO/RCED-99-131 Utility Relocations Appendix II Major Contributors
to This Report Resources, Sumikatsu J. Arima
Community, and Paul D. Lacey Ralph W. Lamoreaux Economic
Luann M. Moy Development Earl P. Williams, Jr.
Division, Washington, D.C. Office of the General Helen T.
Desaulniers Counsel, Washington, D.C. (348097)
Page 35 GAO/RCED-99-131 Utility Relocations
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